In the global game of ‘chicken’ which is now called a ‘trade war’ between China and the US, Beijing seems to have ‘blinked first’, after President Xi Jinping made a speech today promising to ‘lower tariffs’ on the imports of foreign cars (making it easier for US and European carmakers to export to the Chinese mainland, a huge market) and to widen the reach of intellectual property protection, in fact doing thus exactly what the White House Administration wants.
You will recall that US President Donald Trump had yesterday highlighted the difference in import tariffs on foreign cars between the US and China in a tweet, when he stated that: “When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%.”
<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like free or fair trade. No, it sounds like STUPID TRADE - going on for years!</p>— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/983284198046826496?ref_src=twsrc%5Etfw">April 9, 2018</a></blockquote>
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Of course Mr Jinping’s speech writers made it sound like the Chinese President was simply championing ‘global trade’ rather than admitting to a request from his US counterpart, when he said: "Human society is facing a major choice to open or close, to go forward or backward."
"In today's world, the trend of peace and co-operation is moving forward and a Cold War mentality and zero-sum game thinking are outdated."
Wanting to counter Mr Trump’s America First policy, Mr Jinping said to the hundreds of investors gathered on the resort island of Hainan that: "paying attention only to one's own community without thinking of others can only lead into a wall. And we can only achieve win-win results by insisting on peaceful development and working together."
The admission to lower tariffs comes one week after US President Donald Trump had asked the USTR (United States Trade Representative) to find an additional $100bn worth of products to impose tariffs on after he had already imposed tariffs on steel and aluminum.